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Solve operating income according to variable costing

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Reference no: EM132979329

Y Ltd makes gadgets.It has no opening inventory

Closing inventory was 600 units

Budgeted and actual fixed manufacturing costs are $800

Budgeted and actual production is 1600 units

Variable manufacturing cost was $1.50 per unit

The selling price was $5 per unit

Sales commissions of 5% of sales revenue are paid to sales people

Other non-manufacturing fixed costs total $300

Question 1: Calculate the Operating Income according to both Absorption and Variable costing and explain the difference.

 

Reference no: EM132979329

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